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TheStreet Open House

Timing Is Everything For Barrick Gold

NEW YORK, January 22, 2013 /PRNewswire/ --

As analysts and investors continue to extend their bullish views toward gold, Barrick Gold is looking to gain a head start after completing its Pueblo Viejo mine site in Dominican Republic.

With gold production going live in Pueblo Viejo, Barrick Gold Corporation (NYSE: ABX) [ Full Research Report] (1) is certainly off to a great start this year. With a 60% stake in its partnership with Goldcorp Inc., Barrick can ramp-up an average of 500,000-650,000 ounces of the precious metal per year. Pueblo Viejo is reported to hold 25.3 million ounces of reserves as of year-end 2011.

Barrick's focus on Pueblo Viejo is a strategic move to counter higher production costs in South Africa. This also serves to be a bright opportunity for the corporation to recover from African Barrick Gold's bear inflection after its full-year drop of 9% last year. Operating in one of the world's largest gold assets may help Barrick to achieve a more lustrous performance in 2013 and beyond.

The company expects production to pick up pace by the second half of 2013. The odds seem to be in favor of Barrick, as analysts anticipate a significant improvement in the US economy during Q3 and Q4. The US economy and Barrick treading at the same pace is perfect timing as economic conditions continue to improve. However, some analysts project that economic improvement may lower the value of gold.

As one of the world's key markets for gold, India remains a point on the map for economic consideration. Amid speculation that India may increase taxes on gold imports, companies are looking toward stronger US economic performance which would drive consumer spending and investment, possibly offsetting the India factor. Although this is a careful balance, as too much recovery could cause an exodus from the "safe metal".

Regardless of economic climate, analysts and investors expect gold to be a performer in the market this year. Whether it is a hedge-against-risk or a personal investment, Barrick has greater chances of contributing and earning from the global market. Until Pueblo Viejo is on full-production and the global economic climate changes, only time will tell if Barrick will take-off and shine brighter than its gold.

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